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Please ... no one "blames" the poor

April 20, 2009 - Lee Smith

C-SPAN recently offered a roundtable discussion of the housing (banking) meltdown in the United States in 2008. The panel featured professors, a Federal Reserve Bank official and a quartet of journalists who cover business/finance. It was generally illuminating, and offered some good Q&A.

I think the most disappointing thing I saw — and have heard previously — regarding this financial mess is the artifice coming from the Left that some commentators are "blaming the poor" for the housing bubble and subsequent troubles. I have never heard any commentator — conservative or otherwise — blame poor people. I HAVE heard them say that the government overextended itself by instituting and promoting programs that pushed banks to lend to subprime borrowers, i.e. the poor. Fannie Mae and Freddie Mac, for instance, are government-sponsored entities with trillions of dollars of subprime mortages on their books. Other pressure — the Community Reinvestment Act of 1995 — likewise contributed.

It was government's attempt to "help" poor (or poorer) people own their own home that was a starting point for the subprime mortgage fiasco. Yes, banks did then get in on the act, collecting fees upfront and packaging up (now-sour) mortgages to sell as securities. There is plenty of blame to go around. But it is an absolute joke for liberals to hold up the poor as a shield for bad government. Such a straw man is not meant to help analyze what went wrong, but to cover it up.